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Corn Outlook:
The longest government shutdown in history is finally over, but it may be a while before the weekly economic and USDA reports resume. While ending of the shutdown is a relief to traders, their focus is the return of grain exports to China, and the crop report at the end of this week. While China has agreed to increase imports from the U.S., there are few signs of it happening. Meanwhile, corn export inspections last week of 56.0 MB were below the previous week, and the average of 57.9 MB that must be shipped weekly to meet USDA’s target of 2.975 BB. The bottom line in corn is that it has mostly been riding the coattails higher from the rally in soybeans but faces competition from a sizeable crop in Brazil.
Bean Outlook
Exuberance continues to grow over the prospect of China resuming purchases of U.S. soybeans after a long absence. However, there are no signs of it happening yet, as they continue to source their needs from South America. As mentioned in previous comments, their agreement with the Trump Administration is non-binding, and includes no penalties for nonperformance. Looking at exports, inspections last week were mostly run of the mill and slightly above the previous week at 39.9 MB. Meanwhile, because of China’s absence, shipments this season are running 42 percent below a year ago. The bottom line in soybeans is they face two hurdles. One is prices have risen sharply on the hope China will resume large U.S. purchases. However, that has not unfolded so far. The other is how the Supreme Court rules on Trump’s tariffs, and whether they are deemed legal.
Wheat Outlook:
Wheat is searching for a story but is having difficulty finding one. Exports last week were disappointing with inspections of only 10.6 MB. They must average 15.6 MB on a weekly basis to meet USDA’s projection of 900 MB. Right now, they are on track for shipments of 812 MB. The bottom line in wheat is that it faces stiff competition from our competitors.
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